Byron Dorgan

Mr. DORGAN

Mr. DORGAN. Mr. President, let me say my colleague from New Hampshire, while interesting and articulate, stops a couple of pages short of good research. First, my colleague talks at length about the WTO. I am not sure which direction we would be required to bow to the WTO. Is it the east or the west? The WTO, of course, does not run or manage American public policy and trade. But I do want to say this with respect to the Byrd law. My colleague said ``just a few companies'' benefit from it. The fact is, well over 700 companies benefit from it. So, when one talks about misrepresentation, I will ascribe that, I guess, to a mistake.

Mr. DORGAN. No, I only have a minute and a half. Several hundred companies have benefited, not just a few. If one wants to run America's trade policy exclusively through the sieve of the World Trade Organization, I will say get a big armchair, sit back, have a good time, and say: Whatever you want, WTO. That is not my belief. My belief is we ought to invest in this country's strength. When American companies are victimized by unfair trade, we ought to in my judgment have the good sense, as we have in this legislation we call the Byrd law, to use the tariff to recompense them.

Mr. DORGAN. It is not a treaty.

Mr. DORGAN

Mr. DORGAN. Mr. President, I have been working closely with Senator Mike Enzi of Wyoming for several years now on Federal legislation that encourages and rewards State and local governments that radically simplify their sales tax systems by granting them authority to require large sellers to collect taxes on remote sales after substantial simplifications are implemented. This year we have delayed reintroducing related legislation that we cosponsored in the last Congress, S. 1736, primarily due to concerns that some parties have raised about the bill's small business exemption language. After months of negotiation, there's still disagreement among the stakeholders about how the bill should define small remote sellers who would be exempted from the bill's sales tax collection requirements. Regrettably, the small business exemption issues have not been resolved to the satisfaction of all parties and Senator Enzi is re-introducing essentially our same proposal from the 108th Congress as he promised. I certainly respect his right and decision to do so. However, I have been working on small business language that I think is a fair approach and will greatly improve the odds that this bill will become law. The bill I am introducing today is identical to the bill that Senator Enzi is introducing today in every respect--except one. Instead of putting a small business exemption in the bill with a specific dollar threshold, my proposal sets up a process that I believe will help us get to the right answer. Under my proposal, the Small Business Administration (SBA) is required, after considering all relevant factors and soliciting input from the Treasury Department, the Streamlined Sales Tax Governing Board and others, to develop a rulemaking and propose to Congress a definition of those small sellers, including small businesses, which would not be required to collect and remit sales and use taxes. My bill provides for the expedited consideration of SBA's proposal by the U.S. House and Senate and takes steps to ensure that a small sellers' exemption will ultimately be approved by Congress. States would be allowed to require impacted remote sellers to collect sales taxes only after federally mandated simplification is accomplished and a small business exemption is approved by Congress. All of the other parts of my bill are identical to those included in Senator Enzi's bill. These provisions also deserve our immediate attention. There are over 7,000 tax jurisdictions across the country that rely on sales taxes to fund a range of local activities, from education and fire suppression to police protection and road construction. But billions of dollars in needed sales tax revenues go uncollected year after year in many jurisdictions due to a ruling by the U.S. Supreme Court in 1992 that said current State and local sales tax systems impose an undue burden on sellers without a physical presence in each State. Internet and catalog sellers have argued that collecting and remitting sales taxes for thousands of different tax authorities is exceedingly complex. This is a legitimate complaint. And I understand why the U.S. Supreme Court in its Quill decision said that States and localities could not require sellers to collect sales tax on remote sales until the States and localities have first dramatically reduced the complexity and burden of collecting sales taxes. The States and localities have stepped up to the challenge outlined in the Quill decision. For five years now, the States have been working with the retail community and local governments to develop a streamlined and uniform sales tax system agreement that will alleviate the burden of sales tax collection on local retailers and remote sellers. The Streamlined Sales and Use Tax Agreement, which was approved by 34 States and the District of Columbia in November 2002, requires participating States to comply with dozens of stringent simplification requirements that streamline how State sales and use taxes are identified and collected. By early next year, 19 States will have enacted legislation to bring them into compliance with the Agreement and will be members of its Governing Board. By harmonizing their State sales and use tax rules, bringing uniformity to definitions in the sales tax base, significantly reducing the paperwork burden on retailers, and incorporating a seamless electronic reporting process, compliance with the Agreement will result in a significantly reduced tax collection burden on all sellers. As the volume of remote on-line retail sales grow, states are losing more and more sales tax revenues. An estimated $15 billion in sales and use taxes will go uncollected in 2005. This threatens the future ability of states and localities to make critical investments in even the most basic community services, while forcing local retailers who are required to collect sales taxes today to compete with large remote competitors who are not. Senator Enzi and I are determined to address this problem. I think that the legislation I am introducing today strikes a reasonable balance between the interests of consumers, local retailers, remote sellers and the states. Having said that, I will be working with Senator Enzi early in the next session to see if we can put together a single approach that would address any remaining concerns about the small business exemption and help us move this legislative effort forward in the next session. We will also have an opportunity to more fully examine some issues raised by the representatives of local governments and some Indian tribes about the impact of our initiative on their constituencies.

Mr. DORGAN

Mr. DORGAN. Mr. President, I have been working closely with Senator Mike Enzi of Wyoming for several years now on Federal legislation that encourages and rewards State and local governments that radically simplify their sales tax systems by granting them authority to require large sellers to collect taxes on remote sales after substantial simplifications are implemented. This year we have delayed reintroducing related legislation that we cosponsored in the last Congress, S. 1736, primarily due to concerns that some parties have raised about the bill's small business exemption language. After months of negotiation, there's still disagreement among the stakeholders about how the bill should define small remote sellers who would be exempted from the bill's sales tax collection requirements. Regrettably, the small business exemption issues have not been resolved to the satisfaction of all parties and Senator Enzi is re-introducing essentially our same proposal from the 108th Congress as he promised. I certainly respect his right and decision to do so. However, I have been working on small business language that I think is a fair approach and will greatly improve the odds that this bill will become law. The bill I am introducing today is identical to the bill that Senator Enzi is introducing today in every respect--except one. Instead of putting a small business exemption in the bill with a specific dollar threshold, my proposal sets up a process that I believe will help us get to the right answer. Under my proposal, the Small Business Administration (SBA) is required, after considering all relevant factors and soliciting input from the Treasury Department, the Streamlined Sales Tax Governing Board and others, to develop a rulemaking and propose to Congress a definition of those small sellers, including small businesses, which would not be required to collect and remit sales and use taxes. My bill provides for the expedited consideration of SBA's proposal by the U.S. House and Senate and takes steps to ensure that a small sellers' exemption will ultimately be approved by Congress. States would be allowed to require impacted remote sellers to collect sales taxes only after federally mandated simplification is accomplished and a small business exemption is approved by Congress. All of the other parts of my bill are identical to those included in Senator Enzi's bill. These provisions also deserve our immediate attention. There are over 7,000 tax jurisdictions across the country that rely on sales taxes to fund a range of local activities, from education and fire suppression to police protection and road construction. But billions of dollars in needed sales tax revenues go uncollected year after year in many jurisdictions due to a ruling by the U.S. Supreme Court in 1992 that said current State and local sales tax systems impose an undue burden on sellers without a physical presence in each State. Internet and catalog sellers have argued that collecting and remitting sales taxes for thousands of different tax authorities is exceedingly complex. This is a legitimate complaint. And I understand why the U.S. Supreme Court in its Quill decision said that States and localities could not require sellers to collect sales tax on remote sales until the States and localities have first dramatically reduced the complexity and burden of collecting sales taxes. The States and localities have stepped up to the challenge outlined in the Quill decision. For five years now, the States have been working with the retail community and local governments to develop a streamlined and uniform sales tax system agreement that will alleviate the burden of sales tax collection on local retailers and remote sellers. The Streamlined Sales and Use Tax Agreement, which was approved by 34 States and the District of Columbia in November 2002, requires participating States to comply with dozens of stringent simplification requirements that streamline how State sales and use taxes are identified and collected. By early next year, 19 States will have enacted legislation to bring them into compliance with the Agreement and will be members of its Governing Board. By harmonizing their State sales and use tax rules, bringing uniformity to definitions in the sales tax base, significantly reducing the paperwork burden on retailers, and incorporating a seamless electronic reporting process, compliance with the Agreement will result in a significantly reduced tax collection burden on all sellers. As the volume of remote on-line retail sales grow, states are losing more and more sales tax revenues. An estimated $15 billion in sales and use taxes will go uncollected in 2005. This threatens the future ability of states and localities to make critical investments in even the most basic community services, while forcing local retailers who are required to collect sales taxes today to compete with large remote competitors who are not. Senator Enzi and I are determined to address this problem. I think that the legislation I am introducing today strikes a reasonable balance between the interests of consumers, local retailers, remote sellers and the states. Having said that, I will be working with Senator Enzi early in the next session to see if we can put together a single approach that would address any remaining concerns about the small business exemption and help us move this legislative effort forward in the next session. We will also have an opportunity to more fully examine some issues raised by the representatives of local governments and some Indian tribes about the impact of our initiative on their constituencies.

Mr. DORGAN

Mr. DORGAN. Madam President, I ask unanimous consent that the order for the quorum call be dispensed with.

Mr. DORGAN. Madam President, my colleague from the State of Washington just discussed an issue that is going to be a recontested issue this week; that is, drilling in ANWR and an amendment that allows the drilling in ANWR in Alaska attached to the DOD appropriations bill. I was a member of the conference committee that met yesterday starting at noon. I believe we finished close to 5 o'clock yesterday afternoon. We had a pretty aggressive and contentious discussion about this issue. I just want to say that while I believe we need to produce more energy, I supported the Energy bill. I was a member of the Energy Committee and am proud to support the Energy bill. It does mean that we need to produce more oil, coal, and natural gas; produce more renewable forms of energy; move toward a different energy construct, such as hydro and fuel cells; have more efficiency and conservation. I support all of that. But I said then, and I believe now that opening the most pristine area of our country that has been set aside ought to be a last resort, not a first resort. Deciding to open that now and getting oil from it 10 years from now makes precious little sense to me especially when there are alternatives. But even more importantly, adding this controversial issue to the Defense appropriations conference report that is going to come to the Senate really makes no sense at all. It adds a very controversial provision to a bill that basically is to fund the actions of the Defense Department and support our troops. I do not, for the life of me, understand why this is being done. In order for this to be accomplished, there will have to be a debate in this Chamber. When the conference report comes to the floor of the Senate, which I assume is going to be Wednesday, the debate will ensue, and those who oppose adding this unrelated, extraneous, highly controversial issue to the Defense appropriations bill will make a point of order that it violates the rules of the Senate, and it does. There is no question about that. This is violative of rule XXVIII of the Senate. My guess is, from what I hear, the proponents of doing this will then, after the Parliamentarian and the Chair would rule that this violates rule XXVIII of the Senate, ask that the ruling be overturned and have a vote on appealing the ruling of the Chair--in effect, changing the rules of the Senate in the middle in order to accomplish doing something that otherwise would violate the rules of the Senate. Well, they are going to do that the Wednesday before Christmas, do it on a Defense appropriations bill. I, for the life of me, do not understand how they think that is justifiable. But as I indicated, it will be controversial and difficult this week as we go through this. One of my colleagues who is pursuing this says he has a right to pursue it. Right; indeed, he does. He has a right to pursue it, but it will require, in my judgment, the violation of the rules of the Senate, and therefore the changing of the rules of the Senate in the middle of this process. Doing it not only upholds his right but violates the rights of others in the Senate, in my judgment. It abrogates other rights that exist in the Senate. I know this is all inside baseball to a lot of people, and foreign language to people if they do not understand the rules of the Senate, but rules are rules. There are rules established for the way the Senate works for a very good purpose. If, in this circumstance, we decide that in this conference we can take anything, totally unrelated, anything, and stick it on this conference report, bring it to the well of the Senate in a way that is violative of the rules, but then simply by majority vote decide to appeal the ruling of the Chair, it violates the rules and changes the rules and changes them back in a minute. There is kind of an arrogance there that, in my judgment, does not befit the Senate. We will have that discussion at some point later. I wanted to say that I also was a member of the conference yesterday in which we discussed the issue of Katrina relief; that is, relief for Hurricanes Katrina and Rita that hit the gulf coast. I said the Senator from Mississippi, Mr. Cochran, who comes from that region and who has pushed very hard to represent the gulf region in a very substantial way has been successful in doing that. Disaster Relief The one piece that yesterday bothered me, and I indicated so and offered an amendment on it, was a piece that the Senate had, with the leadership of Senator Cochran, previously represented to the House of Representatives, and that was there are many farmers who were devastated by these hurricanes in the gulf. These hurricanes came rushing through and destroyed all the crops, and farmers were devastated. So there is about $404 million in the disaster package that will help those farmers in the gulf. The point I made was--and I know the Senator from Mississippi had previously supported this point because the Senate position was that we should provide disaster relief not just for those farmers in the gulf-- they, in fact, should have disaster relief, but there are others in this country who had weather-related disasters, and they ought to, as well, be people who would be eligible for disaster assistance. In my State, for example, torrential rains in the spring meant that 1 million acres of land were not planted, a million acres were not able to be planted. If you are a farmer and your acreage is in that million acres, you are done. You are in huge trouble. So they ought to also qualify for disaster aid. I offered the amendment yesterday afternoon to add the $1.6 billion to the package that would have allowed us to be fair to all of the rest of the farmers in this country who have been hit with weather-related disasters, and the Senate conferees passed my amendment. We sent it to the House conferees, and they rejected the amendment. So now we have a circumstance where there is no disaster relief for those who have been hit by this disaster and weather-related disasters in other parts of the country. Family farming is probably easy for some to forget, but family farming is very important to our country. These are families who live out under the yard light, in many cases far from town working to try to make a living against all the odds, against the potential of a grain market collapsing, against the odds that there may be disease in their crops or hail or too much rain or too little rain, all kinds of natural disasters. And we, generally speaking, reached out to those family farmers to say we want to help you because we want to be able to keep family farms on the land in this country. Yesterday's action by which the House of Representatives rejected that aid, the disaster assistance, is, in my judgment, a huge mistake. We have had severe drought in Illinois, Missouri, parts of Iowa, and other States. As I indicated, we had torrential rains in some disaster areas in my State earlier this year, and there are other parts of the country in which family farmers suffered the same fate. I think it is wrong for this Congress to decide that some will get assistance and others will not, if all have--in terms of the groups who would be affected, if all of them were affected by weather-related disasters. I just think that is wrong. The House of Representatives rejected that because they said the $1.6 billion was above the agreement, and the President and the White House would not support it. I want to just talk a little about our fiscal priorities. Because something is seriously wrong here. Last year, we had a provision in this Chamber that provided a very significant tax cut, and it was a tax cut for the largest corporations in our country. I objected to it, standing at this desk, but it got through the Congress, and it is now law. I want to talk about that tax cut just for a minute because it is not just on the order of $1.6 billion we could have used to help family farmers struggle through a tough time, it is about a $60 billion tax cut to the biggest corporations in our country. It was something that had nothing to do with the substance of the bill. It was called the JOBS Act that was run through the Congress, the JOBS Act. Presumably, it was titled the JOBS Act because those who offered it said it would create new jobs. In fact, I will read a couple of comments from my colleagues. One of my colleagues says the idea is for 1 year to reduce the tax burden and bring those profits back into this country, to invest them in ways that help your business, and this creates new jobs. Another of my colleagues said, well, this is insourcing. This insources jobs to the United States. This will create a lot of jobs in the United States. Another of my colleagues said if you are interested in creating jobs, it has been estimated on a conservative basis this proposal will create 660,000 jobs. What was this tax proposal? It was to say to the largest corporations in this country, do business here and overseas, if you have earned income overseas, at some point you expect to bring that income back to this country to your headquarters and to your stockholders, and when you do that you would be paying corporate income taxes. We have a corporate income tax rate of 35 percent, and when you repatriate earnings, as they call it, from your overseas operation, you pay income taxes in this country. But there is a special little deal that has been in law for decades and decades--in fact, the first person who tried to get rid of this special deal was John F. Kennedy. That tells you how long it has been there. It is called deferral. Do business overseas, move your plant, move your jobs, do business overseas and, by the way, you get a tax break. You don't have to pay taxes on those earnings from overseas until you bring them back to this country. So that has been around for a long time. That tax break anticipates, though, at some point, even though you can defer paying taxes, you are going to have to bring the profits back when you do business overseas, and you are going to have to pay taxes in this country on those profits. It would be at the corporate tax rate of 35 percent, except a year ago this Congress said the following: We would like to create a great, big old dessert tray for the biggest corporations in the country. When you bring your profits back in the next year, we will tax them at 5.25 percent--no, not 35 percent, 5.25 percent. Do people around this county have that right? Is there a Johnson or an Olson family, that brings their profits back or pays income tax at a 5.25-percent tax rate? No, no, no. Real people pay taxes at rates far in excess of 5.25 percent. But now some of the biggest corporations in the country are repatriating profits to this country and paying 5.25 percent in income taxes--5.25 percent, a fraction of what the lowest income people in this country are paying. And, oh, by the way, they are also cutting jobs at the same time. Now, let me just show a picture of a building in the Cayman Islands because it is part of the puzzle. This is a picture of a building in the Cayman Islands. This is a five-story building on Church Street in the Cayman Islands. It is called the Ugland House. This five-story white building on Church Street is the official address for 12,748 corporations. Now, you may ask, how can that be? It is just an address. It does not mean anything. All it means is they set up an address in the Cayman Islands so they can run their profits through the Cayman Islands and avoid paying taxes in the United States. Madam President, 12,748 companies run income through this building in the Cayman Islands. It is just an address. Now, the folks who push this bill on the floor of the Senate, that has now cut taxes by $60 billion--$60 billion it costs this country in lost tax revenue from the biggest corporations in the country that are now repatriating income at tax rates that are a fraction of what every other American pays--those folks said this is going to create jobs. Well, really? Let's just look at that. I will just give you a couple examples. I could bring over a lot of charts. Hewlett-Packard, they are bringing back $14.5 billion they made overseas, and they are going to pay a 5.25-percent income tax rate. They also announced they are going to cut 14,500 jobs. Motorola, $4.4 billion they are bringing back in repatriated taxes, paying a 5.25-percent income tax rate. They are cutting jobs. Colgate Palmolive, they are cutting jobs. The list is pretty substantial, actually. Merck Corporation is cutting jobs, and repatriating earnings. So to my colleagues who are on the floor pointing out that if we just pass this $60 billion tax cut, in 1 year--$60 billion tax cut for the largest companies in our country that do business overseas--they would create more jobs at home, I wonder, now, how they will come to the floor of the Senate and answer the question: If you actually see the repatriation of about $200 to $220 billion, and companies using a substantial portion of that to buy back their stock, and other companies repatriating it and cutting jobs, how do you, then, justify having given a $60 billion tax cut to the biggest corporations in this country? There will not be much of an answer to that. I think of the quote from Will Rogers when I think of the wool that was pulled over the eyes of the Congress, or perhaps it was not. Perhaps the Congress is controlled by a majority who just find it important every day to get up to see how you can give big tax breaks to the biggest corporations or the highest income earners. Perhaps that is just an advocation that is now natural for those who control this Congress. Will Rogers once said: It is not what they know that bothers me, it is what they say they know for sure that just ain't so. That is the case with this $60 billion tax cut, in 1 year, that affects the largest corporations in this country. Here are some of the editorials and notices about it. October 16 of this year: It shouldn't escape Americans' attention that U.S. companies have disclosed plans to repatriate $206 billion in foreign profits this year under a one-time tax break allowed by Congress on the grounds--you guessed it--that such a big tax break would ignite a strong spurt in job growth. The upshot, of course, is that no such job spurt appears to be materializing. Some have even announced plans to cut operations and jobs. Colgate Palmolive repatriated $800 million in foreign profits, planning to cut 4,450 jobs and a third of its plants over the next 4 years. Interestingly, Even the primary advocate for the special, one-time tax break, economist Allen Sinai, is now soft pedaling his prediction of 660,000 new jobs over 5 years. He now says the efficacy of the tax break will be hard to prove. The Chicago Tribune, August 11: Motorola disclosed Wednesday it will bring $4.4 billion in profits back under the controversial Federal tax law that was passed, and announced Wednesday it will cut 500 more workers than previously announced. Hewlett-Packard is going to bring back $14.5 billion. And, by the way, they get to pay at a 5.25-percent income tax rate. Wouldn't every American like to pay an income tax rate of 5.25 percent? But it is not so. Just the big shots do. They pay 5.25 percent, bring back $14.5 billion, and lay off 14,500 workers. Almost perfect symmetry, isn't it? You bring back $14.5 billion, pay a bottom-rate tax rate that nobody else gets, and you lay off 14,500 workers. It is not only this technique that is bothering me but many others these days. There was a story recently in the Wall Street Journal about some of the largest technology corporations that are setting up buildings in other countries. This one is in Ireland. You set up a building in Ireland--a tiny little quiet building, on a quiet street, in Dublin, Ireland--and then move your intellectual property, programming, and software and so on to a wholly-owned subsidiary in that country, and then license it back in other countries where you are selling it, and run billions of dollars--billions of dollars--through that little address in Ireland. What is the purpose of that? Avoiding taxes. So you do not have to pay taxes. In this case, one of the companies avoided paying $500 million a year in taxes to the U.S. Government by moving its software to Ireland, running the licensing through Ireland, and essentially moving taxes and income away from the U.S. Government. The question is, When will this stop? We are up to our neck in debt. We have very substantial Federal deficits, the largest trade deficits in history, and we have corporations in this country that have decided they want all the advantages America has to offer. But they do not want the responsibilities to pay taxes. And they have friends in this Congress who will say: Oh, by the way, if you do pay, we will give you a special discount rate, one of these blue light specials. Regular folks are going to pay 20 percent, 30 percent, 35 percent, 36 percent, but, no, you get to pay 5.25 percent. I think it was Tom Paxton who used to sing that song ``I'm changing my name to Poland,'' after Poland got a Government loan some years ago. Perhaps there are American families who might want to change their name to Hewlett-Packard or Motorola or Merck. Perhaps American families would like to pay a 5.25-percent income tax rate. And maybe American families would like to set up an address on Church Street in the Cayman Islands so they can run their income through the Cayman Islands and avoid paying taxes. But maybe not. Most American families say the Pledge of Allegiance, believe in this country and its promise, understand we have things to do together. We have a Defense Department to fund. We build roads. We have the National Institutes of Health to fund. We do so many things together in Government. We educate our kids. We have security on the streets in the form of law enforcement. Maybe most Americans know that is what we do together, and the responsibility is to pay taxes. Do we like it? Not necessarily. Do we understand it? Sure. But not everybody apparently understands it, because some decide to run their business through this five-story building for the purpose of avoiding taxes. Our domestic individual tax rates are 10 percent, 15 percent, 25, 28, 33, and 35. Those are the tax rates for individuals who file individual tax returns. There is only one tax rate I know of that is lower than that, and that is the tax rate the largest corporations will pay when they bring $220 billion back that this repatriation provision allows. So they will pay half the rate of the lowest rate the lowest income Americans will pay. That is unbelievable. It was pushed through this Congress with the promise that it would produce more jobs. Most of us said that is nonsense. We knew it wasn't going to happen. But it was pushed through the Congress. At this desk right here, Senator Fritz Hollings--now not in the Senate; he retired--offered the amendment to strip this provision out of that tax bill. Those who wanted this provision would hear none of it. They wanted it. They got it. So now we have some of the highest income enterprises in the world paying a 5\1/4\-percent tax rate on the repatriation of profits. When I mentioned the building on Church Street in the Cayman Islands, Senator Levin and I had the General Accounting Office do an evaluation of who is running operations through these tax haven countries. Fifty- nine of the 100 largest publicly traded Federal contractors--companies that contract with the Federal Government, that have tens of billions of dollars in contracts with the Federal Government--had established hundreds of subsidiaries in overseas tax havens. In other words, they want to do business with the Federal Government, make income from doing so, but want to run it through tax subsidiaries in tax havens to not pay taxes to the Federal Government. It is unbelievable. The point is, we sat yesterday in conference discussions for 4 hours and talked about all kinds of funding issues. There wasn't $1.6 billion to help family farmers through tough times, but there was $60 billion this year given to the largest corporations to repatriate their profits with the promise that they would produce new jobs. The fact is, those jobs don't exist. This was an unforgivable gift, a giveaway that made no sense. It is one more example of doing the wrong thing at the wrong time and pledging that somehow it is going to help advance the interests of our country. A man named Uwe Reinhardt from Princeton University probably captures all of this best in terms of priorities, warped priorities, wrong priorities. In a piece he had written talking about tax cuts and health insurance, he wrote a memo at the start of it: Dear God, we had to decide between health insurance and a tax cut, and we took all the money as a tax cut. We hope that pleases you. A grateful nation. This is, after all, about priorities, what makes our country stronger, what improves our country. We have a very substantial Federal budget deficit. Yet we will now, I believe this week, see the reconciliation bill with additional tax cuts that will substantially benefit upper income people. On top of the Federal budget deficit, we will see additional tax cuts benefiting upper income people. We have a substantial trade deficit, well over $700 billion a year, and a huge movement of American jobs overseas, especially to China. Any worry about that? Not much. You can't find much around here. I have spoken at length about it. We actually have the incentive, the perverse, obscene incentive that says to a company today, on Monday, anywhere in this country: If you fire your workers, put a padlock on the front door of your manufacturing plant and move the whole thing to China and hire Chinese workers, we will give you a deal. You get yourself a tax break. That is unbelievable, but it is in the law. Get rid of your manufacturing workers. Shut down your American plant. Move the jobs to China, Indonesia, Sri Lanka, Bangladesh, we will give you a tax break. We have tried four times to shut down that tax break, and unbelievably, there is a majority of Senators who believe that tax break should continue to exist, a tax break that says: On tipping the balance, we believe we ought to provide incentives to move American jobs elsewhere, get rid of American jobs in search of 30-cent labor with 1 billion people around the world who are willing to work that way and companies who are interested in finding places where you can hire people for 30 cents an hour. You can dump the chemicals into the rivers and the air. And by the way, you don't have to have a safe work plant. And importantly, if somebody tries to organize because they don't like the working conditions, you can fire them. In some countries, they will put them in jail for you. We say: Want to get rid of your American workers, want to find cheaper labor someplace, get rid of all the encumbrances? We will give you a tax break if you want to do it. That is unbelievable, but it is part and parcel of this whole story about a five-story building with 12,748 companies calling it home for the purpose of getting a tax break by running income through the Cayman Islands. Once again, companies that want all of the opportunities that come with being American but seem to want to avoid some of the significant responsibilities; that is, to pay taxes to support this Government. We will, in the next 24 or 48 hours plus, have a robust and aggressive debate on the issue of attaching ANWR to the Defense appropriations bill. When that occurs--I assume on Wednesday--my hope is we will come to the right solution. The right solution is to pass legislation that will fund the troops, fund the needs of the Defense Department. We have considered and will consider the issue of ANWR in the future. There are other mechanics and other approaches by which that should be considered and will be considered in the Congress. I believe this is an inappropriate approach. I yield the floor.

Mr. DORGAN

Mr. DORGAN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. DORGAN

Mr. DORGAN. Mr. President, my understanding is that the Senate is taking up the free-trade agreement with Bahrain. Of all the priorities that exist in our country dealing with the subject of trade, somewhere close to last would be a trade agreement with Bahrain. Nothing against the country of Bahrain. I am sure it is a wonderful place. I have not actually visited there. But I believe the total trade between our country and Bahrain is somewhere in the neighborhood of $700 million, less than $1 billion on both sides of the ledger. There are all kinds of trade problems our trade officials ought to be working on. But a free-trade agreement with Bahrain would not rank right near the top. Let me tell you what would rank near the top. We are deep in debt with respect to international trade. This country is in desperate trouble with respect to trade. We are now experiencing a trade deficit of over $700 billion a year. That means every single day, 7 days a week, we buy more from abroad than we sell in exports, $2 billion a day every day 7 days a week. How long can a country sustain that? We have lost 3 million jobs in this country in the past 4 years--3 million jobs--going to China, to Vietnam, Bangladesh, Indonesia, and more. So what is all of this about? It is about a new strategy, a strategy developed in the past two to three decades, but accelerated now more recently. It is a strategy that says we are a global economy, and because it is a global economy, enterprises, corporations, and others should take a look around this world and find out where these 1 to 1.5 billion people are who will work for pennies an hour, employ them, shut down your U.S. manufacturing plant, hire the employees in China or Bangladesh, for example, and it will all work out because they will work for 30 cents an hour, and they will build bicycles and wagons and produce textiles and other things. And then you can ship it to a big box retailer in this country, and someone can walk through the front door of that big box retailer and buy a cheap product. I noticed last year at Christmastime there was a woman from Texas who decided she was going to buy her children some presents, and she wanted to make a point of buying American made products. So she started shopping, and she discovered she could not purchase one present for her children that was made in the United States. What does it mean? It means our country is changing and our country is, in my judgment, being hollowed out. Jobs are being lost, the middle class is shrinking because we have been told now American workers must compete with others around the world who are willing to work for 30, 40, 50 cents an hour, work without health insurance, without a retirement, and work under the threat, in many cases, if they would like to organize as workers, of being sent to prison. I can actually give names of people now sitting in prison in China whose transgression was deciding to try to organize workers because the conditions in those plants were awful. So there are people who tried to organize workers, were arrested, and now are sitting in prison. Those are the conditions under which we are now trading. One-third of our trade deficit, incidentally, is with the country of China. Last month, we sold China $3 billion worth of American goods--$3 billion. And we purchased from China $23 billion in goods. China has almost 1.4 billion people, and we are told this is going to be a huge market for American production. The creation of a middle class in China is going to be terrific for our country because we will be able to produce and sell into the Chinese marketplace. It is not working out that way, of course. What is happening is China sells us $23 billion worth of goods produced in China, and we sell them only $3 billion worth of goods produced in America, $20 billion-a-month trade deficit with China. On an annual rate, that is a $240 billion deficit with China in a year. That is unbelievable. And this Congress is perfectly content to dose through it all; in fact, probably a very satisfactory sleep for most because they still are willing to stand on street corners and chant about this so-called free trade that is not free at all. Some will say, and I think perhaps most who have studied economics will say, that this is unsustainable. This country is headed toward some whitewater rapids with these kinds of trade deficits. We are not only losing American jobs because American workers are being told they cost too much money, and we are going to produce elsewhere, but we are also up to our neck in debt. Incidentally, the trade deficits are financed by selling part of our country. Every single day we sell another $2 billion worth of our country to foreigners. That is the way the trade debt is financed. In most recent months, one of General Motors' top executives called in about 300 of the top executives of the companies they buy parts from and said this to them: You are the companies from which we buy automobile parts. We want you to begin producing those parts in China. You need to move those parts to China. Get your production done in China. We are about driving down the costs. Then we see Delphi, which was formerly part of General Motors and then spun off as the largest automotive parts producer, going through bankruptcy, and Delphi says to the public: The problem is we have people making $20 to $30 an hour. That is up to $40,000, $50,000, $60,000 a year. What we want to do is get to a point where we have people making $8 to $10 an hour. In fact, what we want to do is move most of our production offshore to China and elsewhere so we can pay 30 cents an hour. And then the jobs that are retained, we want to pay $8 to $10 an hour. I ask this question of, yes, General Motors, IBM, and all of these companies engaged in this activity, and virtually all of them are: Who will be your future customers if your job is to lay off American workers so you can produce elsewhere where it is cheap in order to sell back into this established marketplace? Who is going to buy your laptop computers and your automobiles? If we were going to do something representing a priority today for me on trade, I would deal with China first. But there are all kinds of bilateral trade problems with a number of major trading partners. Let me give you some examples. I have mentioned many times that in the past year we will have shipped in well over 600,000 automobiles from Korea into this country. In return, we were able to send about 3,900 American vehicles to be sold in Korea. Sound fair? Sound reasonable? Sound like a thoughtful deal for America? The answer is clearly no. What this means is shifting American jobs elsewhere, produce the cars in Korea, ship them to the United States, and if you start selling any U.S. vehicles in Korea, shut it down. That is what has happened. Incidentally, the Dodge Dakota pickup truck became a little bit popular for a couple of months in Korea. They saw that and shut it down just like that. They do not want American vehicles sold in Korea. They just want to sell their cars here. China has 20 million cars on the road. It is estimated that by the year 2020 they will have 120 million cars on the road. They are gong to add 100 million cars because they want to start driving in China, even in the rural areas of China. General Motors says a Chinese company has stolen the production blueprints for one of its small cars. They have actually filed a legal action against the Chinese company for stealing what they call the production blueprints for a vehicle. So a company in China called Chery, which is only one letter away from Chevy, is going to be producing a car called the QQ. The QQ is a car that will be produced in China with what General Motors alleges are the production blueprints that were stolen from General Motors. Recent Wall Street Journal reports say that the Chinese are gearing up for a very substantial automobile industry, and they want to export around the world. I ask unanimous consent for an additional 5 minutes.

Mr. DORGAN. They want to export those vehicles around the world so very soon. Unless something changes, China will be exporting automobiles as Korea is doing. Does anyone think China wants to take American vehicles into China? No, no. What they want to do is accept the American marketplace as a sponge for all that they produce. I have spoken at great length on the Senate floor about the people who have lost their jobs in this country when their plants closed down. I talked about Pennsylvania House Furniture. In fact, I talked to the Governor of Pennsylvania about this. Pennsylvania House Furniture, the description of that for almost a century was using the finest Pennsylvania wood and producing high-end furniture, and when people bought Pennsylvania House furniture, they knew they were getting a real piece of furniture. Well, La-Z-Boy bought that furniture company. After a couple of years, La-Z-Boy decided, we want to produce that furniture in China. The Governor of Pennsylvania and others tried to put together a financing package to keep the jobs in Pennsylvania, to do everything to see if they can keep in this country the Pennsylvania House Furniture Company that had been around a century. The answer was no. La-Z-Boy said: Those jobs are going to China. Now what they do is ship the wood from Pennsylvania to China and pay the Chinese workers pennies on the hour to put the wood together in furniture and then send the furniture back to our country to be sold. Yes, it is Pennsylvania House furniture but not made in Pennsylvania. So those workers lost their jobs. Is it because they were not good workers? No, they were craftsmen. In fact, the very last piece of furniture they made in Pennsylvania they turned upside down and those craftsmen who made that furniture all signed their name on it, the last piece of furniture that company made in America by American workers. La-Z-Boy, which owned Pennsylvania House Furniture, decided, as so many others have, that those jobs had to go to China because they can pay pennies on the hour, they can work kids if you want to, they can dump the pollution into the sky and into the water, and they will not have anybody worrying about whether they are going to form a union because it will not be allowed. That is not fair trade. That is not something we should continue to allow in this country, stand by and thumb the suspenders and whistle a little bit while Americans lose those jobs and those jobs go to China and then come back to a big-box retailer to be sold at discount prices. Who ultimately is going to buy those products? My point is this does not work. Instead of dealing with a range of issues, yes, with China, Korea, Canada, Mexico, Europe, with whom we have very large trade deficits and growing trade deficits, I might add, instead of dealing with that, talking about it, responding to that, trying to deal with this country's challenges in trade, we are on the Senate floor talking about the free trade agreement with Bahrain. Where is the energy to do something real? Once again, it is a small moment to do a free trade agreement with Bahrain. It is a very small country in the middle of the Middle East. Our total trade with them, on both sides, is $700 million a year. We cannot get trade officials in this country, this administration or this Congress, to look truth right in the eye on these kinds of problems, the huge deficits, year after year, that are shipping jobs overseas. There is another corollary to this as well. The same companies that decide that they should not hire Americans, they should shut down the American plant and, by the way, do so with an encouragement by this Congress because this Congress gives them a tax break--and we voted I think four times on my amendment to shut down the tax break that subsidizes jobs going overseas, but, no, this Congress still wants to provide a tax subsidy to those companies that shut down their American plant and move jobs overseas. But this new environment in which companies do not say the Pledge of Allegiance any more but they are an international corporation, they want to produce where they can produce for pennies, they want to sell into this marketplace where they can get high-end consumers to buy it, and then at the same time, by the way, they want to run the income, if they can, through a mailbox in the Bahamas or the Caymans. I want to mention that there is one building that is a five-story building in the Cayman Islands located on Church Street. I have brought a photo of it to the Senate floor previously, and I should do that again at some point. That building is the official residence and address for 12,748 corporations. Now, one might ask, how is it 12,748 corporations can share a residence or an address in a 5-story white building in the Cayman Islands? Simple. It is nothing more than an address. What is the purpose of having an address in a 5-story white building in the Cayman Islands? So that one does not have to pay taxes to this country. Money can be moved through a tax haven and avoid paying U.S. taxes. So one is a U.S. company, they are chartered probably in Delaware, have all the advantages of being an American, but now the new economics tell them they should produce in China, sell in this marketplace and set up an address in a 5-story white building mailbox in the Cayman Islands, so that they can have all the opportunities that come with being an American, except the responsibilities to hire American workers or to pay American taxes. That is what is happening. People say, well, that is just an anticorporate rant. It is not. I think there are some wonderful corporations in this country, some terrific corporations with inventive people, creative people, who have advanced this country, have produced wonderful, breathtaking products, but I think there is a culture in this country, with respect to trade and corporate responsibility, that has gone off the track. In this Congress, we cannot get anybody to talk about trade, except perhaps to come and stand around to talk about the Bahrain trade agreement on a Tuesday. Would it not be wonderful if we were talking about this full-blown crisis of $2 billion a day to date, $2 billion that we purchase from abroad more than we sell to abroad, and therefore today someone off the shores of this country owns $2 billion worth of this country. We are selling this country piece by piece. A budget deficit in this country is financed in the traditional way, but a trade deficit is financed in a very different way. When we purchase those foreign goods, the trade deficit puts American currency in the hands of foreigners. They then use that currency to purchase real estate, stocks, bonds, to purchase part of this country. Every single day we are selling part of this country with an incompetent trade strategy, a jingoistic trade strategy that chants about free trade that has long ago been discredited. We ought to be describing circumstances of requiring fair trade. As a country, we ought be a leader in deciding, yes, let us expand trade in open markets, but it must be fair, and if it is not fair then this country is obligated to take the lead to insist on and demand fairness. Our job ought to finally be to pull others up, not to push us down. What has happened more recently is we are pushing American workers down, pushing incomes down, the standard of living down in this country and seeing jobs exported, opportunity exported, and exporting part of our future. That is not satisfactory to me. I regret we are here talking about this free trade agreement when in fact we should be talking about the center, the bull's-eye of the target dealing with trade that is causing this hemorrhage of red ink and the loss of American jobs day after day after day. I yield the floor.

Mr. DORGAN

Mr. DORGAN. Mr. President, reserving the right to object, my understanding is that we have 15 minutes equally divided on the Dorgan- Dodd amendment, and that was to start at 3 o'clock. My recommendation would be that if there is 10 minutes now allocated during that period we simply move the vote to 3:40 so that we will have the 15 minutes equally divided--30 minutes equally divided.

Mr. DORGAN. Mr. President, how much time remains?

Mr. DORGAN. Mr. President, first, I thank my colleague from Connecticut for his support on this amendment. I want to spend a little time responding to some of the opponents who have completely mischaracterized the amendment, which is everyone's right on the floor of the Senate. It is important for everyone to hear the facts. We did hear last evening a colleague say he was sick of populism, just sick of populism. When the little guy gets hurt, and the little guy is getting rich at the same time, populism means you stand up for the little guy. And I would say, get used to it. If you are sick of it, get used to it, because this Senate floor is where you stand for people who don't have the capability to stand for themselves. In this case, what is happening in our country is unfair, just unfair. The oil giants, larger because of mergers, are recording record profits, the highest in the history. Here are what the profits look like, unbelievable profits, the highest in the history of corporate America, and the consumers experience all the pain. They wonder, as they see the headlines, ``Big Oil's Burden of Too Much Cash,'' ``High Energy Prices Lift Profits at ConocoPhillips by 89 Percent.'' I could go on and on. ExxonMobil, $9.9 billion in the third quarter. I could go on. The consumers wonder, as they fill their tanks, about these headlines. They wonder about these headlines as they try to heat their home this winter and pay 40, 50, 60 percent more to do it. They wonder out on the farm someplace about these headlines when they try to figure out, How am I going to be able to buy a tank of fuel? This proposal is very simple. This proposal says that for oil over $40 a barrel price, we would impose a windfall profits tax, except that no company would pay it if all their profits are being invested into the ground to search for more energy or above ground to build more refineries. If that is what they are doing with profits, this doesn't affect them. They don't have to worry. We have had all kinds of folks coming out to the floor with talking points. If I was the oil industry, I wouldn't like what we are doing either. I understand that. It is perfectly logic. The talking points say if this amendment is passed, we are going to see less production of oil and gas. That is total rubbish, complete nonsense. In fact, the most significant incentive for the increased production of oil and gas in this country would be the prospect of having to pay a 50-percent excise tax on profits if you don't use them for that purpose. We say: If you do use them to expand supply of energy and therefore reduce price, you are exempt. Don't worry about this. Let me show what BusinessWeek says: Why Isn't Big Oil Drilling More? Rather than developing new fields, oil giants have preferred to buy rivals--drilling for oil on Wall Street. If you are buying back stock, drilling for oil on Wall Street, or if you are not using the money to expand the supply of energy, then you risk being hit with a windfall profits tax, the entire purpose of which would be to provide rebates to consumers, not to bring money into the Federal Treasury, but instead to provide a recapture and provide rebates to consumers. It is painfully simple. Again, I say, as my colleague from Connecticut has, I think profits are fine. It is what makes our businesses work. But these are profits the likes of which we have never seen. Last year, the average price of oil was $40 a barrel, and the industry had the highest profits in history. This is unfair in this country, and we need to do something about it. I have quoted before Bob Wills and the Texas Playboys, but what he said in that song in the thirties certainly does apply to this: The little bee sucks the blossom, but the big bee gets the honey. The little guy picks the cotton and the big guy gets the money. And so it goes. At this point, using energy is not a luxury. Using energy for every American is a necessity. The question is, should the oil giants, made larger by blockbuster mergers, be showing record profits and then using the money to drill for oil on Wall Street, hoard cash or buy back their stock at the same time average Americans are trying to figure out how on Earth do I pay this fuel bill? Our amendment tries to solve that. How much time remains?

Mr. DORGAN. I reserve my time. If there are speakers on the other side, I prefer they use their time.

Mr. DORGAN. Mr. President, I yield myself 2 minutes. That was about as good a presentation supporting windfall profits as could be made. These charts of an 89-percent increase, the highest profits in the history of corporations, and so on, it is a pretty hard case to make on the floor of the Senate that these profits don't exist or this industry somehow isn't very profitable. My colleague talks about the long run. The problem is you don't heat your home in the long run, you heat your home tonight. And if you are stuck with a 50-percent increase to heat your home tonight, you don't worry about the long run; you have to figure out how you do it now. My constituents and his, when they order a load of fuel to be delivered to their farm and ranch, they are not going to pay for that in the long run; they are going to pay for it now. My point is this: This notion of the marketplace functioning--I would love to have a debate about the marketplace. This is so far from the free marketplace, it is unbelievable. There is no free market here. You have OPEC ministers sitting around a table deciding supply and price. There are the biggest oil companies, much bigger because of mergers, that have more raw muscle in the marketplace, and then there are the futures markets which, instead of providing liquidity, have become grand casinos of speculation. Now we call it the marketplace. Too bad for the consumers. Somebody ought to probably stand on the side of the consumers--that is the point of all of this--to say that this is not fair. This marketplace does not work for everybody. It works to provide the biggest profits in history for the oil companies. My colleague says: Well, they are just doing a really good job. Yes, they are. BusinessWeek itself says what they are doing is drilling for oil on Wall Street, not drilling for oil underground. Our point is simple: No major oil companies will pay this windfall profits tax if they are doing the right thing. And if they are not, we will recapture it and send rebates to consumers. If my colleagues are against that, vote against the amendment, and I understand it. I reserve our time.

Mr. DORGAN. Mr. President, pursuant to section 904 of the Congressional Budget Act of 1974, I move to waive the applicable sections of that act for purposes of the pending amendment, and I ask for the yeas and nays.

Mr. DORGAN

Mr. DORGAN. Mr. President, I am pleased to join Senator Domenici in introducing the Border Security and Modernization Act of 2005. Senator Domenici and I represent border States, but the bill we are introducing today is not one of merely regional importance. Border security is an issue that affects our country as a whole. We cannot have homeland security without strong and effective border security. The Administration has signaled that it wants to have a vigorous debate on border security and immigration issue early next year. Our bill does not attempt to change immigration law, but it squarely addresses the border security issue. I began working on border security long before the attacks of September 11, 2001. The Northern border is over 4,000 miles long. In the past, almost all of our resources in this country were targeted at the Southern border. It used to be that we had ports of entry at the Northern border where, at night, the only barrier was an orange rubber cone in the middle of the road. The polite people crossing at night actually stopped and removed the cone before they came across the border. Those who were not so polite would run over it at 60 miles an hour. In 2001, before the September 11 attacks, I proposed something called the Northern Border Initiative. That bill added hundreds of Customs officers to the Northern border, and it became law. I also worked to replace the orange cones with hardened gates. But we clearly have to do much more. The legislation we are introducing today, which Senator Domenici has described in detail, would devote significant new resources to our border security. Among other things, this legislation would authorize the hiring of an additional 1,000 Customs and Border Protection inspectors and Immigration and Customs Enforcement officers a year for the next five years. It would authorize the Department of Homeland Security to work with States to use National Guard and a volunteer force of retired law enforcement officers as resources to help monitor the borders. And it would have the Federal Government reimburse State governments for the cost of detaining undocumented aliens while decisions are made regarding possible deportation. This bipartisan proposal is not about immigration. It's about border security. We need to do a better job of securing our borders, and we need to do so on an urgent basis. We hope our colleagues will join us, on a bipartisan basis, in supporting this legislation.

Mr. DORGAN

Mr. DORGAN. Mr. President, I am pleased to join Senator Domenici in introducing the Border Security and Modernization Act of 2005. Senator Domenici and I represent border States, but the bill we are introducing today is not one of merely regional importance. Border security is an issue that affects our country as a whole. We cannot have homeland security without strong and effective border security. The Administration has signaled that it wants to have a vigorous debate on border security and immigration issue early next year. Our bill does not attempt to change immigration law, but it squarely addresses the border security issue. I began working on border security long before the attacks of September 11, 2001. The Northern border is over 4,000 miles long. In the past, almost all of our resources in this country were targeted at the Southern border. It used to be that we had ports of entry at the Northern border where, at night, the only barrier was an orange rubber cone in the middle of the road. The polite people crossing at night actually stopped and removed the cone before they came across the border. Those who were not so polite would run over it at 60 miles an hour. In 2001, before the September 11 attacks, I proposed something called the Northern Border Initiative. That bill added hundreds of Customs officers to the Northern border, and it became law. I also worked to replace the orange cones with hardened gates. But we clearly have to do much more. The legislation we are introducing today, which Senator Domenici has described in detail, would devote significant new resources to our border security. Among other things, this legislation would authorize the hiring of an additional 1,000 Customs and Border Protection inspectors and Immigration and Customs Enforcement officers a year for the next five years. It would authorize the Department of Homeland Security to work with States to use National Guard and a volunteer force of retired law enforcement officers as resources to help monitor the borders. And it would have the Federal Government reimburse State governments for the cost of detaining undocumented aliens while decisions are made regarding possible deportation. This bipartisan proposal is not about immigration. It's about border security. We need to do a better job of securing our borders, and we need to do so on an urgent basis. We hope our colleagues will join us, on a bipartisan basis, in supporting this legislation.

Mr. DORGAN

Mr. DORGAN. Mr. President, I was not aware that time had to be yielded for the purpose of offering an amendment. I appreciate that, but the Presiding Officer was asking ``who yields time.'' My understanding is a Senator can seek recognition and, therefore, offer an amendment on his own volition.

Mr. DORGAN. Mr. President, I offer an amendment on behalf of myself, Senator Dodd, Senator Boxer, Senator Reed of Rhode Island, and Senator Lieberman. I send the amendment to the desk and ask for its immediate consideration.

Mr. DORGAN. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. DORGAN. Mr. President, this is not a new subject. It is one myself, Senator Dodd, and others have spoken about on the floor, as a matter of fact, in recent days and weeks. Let me describe briefly that it is, in fact, an amendment that is identical to the legislation we have offered that would create a windfall profits tax on profits of the major integrated oil companies, profits above $40 a barrel for oil, the purpose of which would be to collect that money and rebate it in its entirety to consumers. Or in the alternative, if the major integrated oil companies are using that money to invest into the ground or to build refineries above ground to expand the supply of energy and, thereby, bring down the price, they would be completely exempt from the windfall profits tax. If they are using their profits above $40 a barrel for the purpose of buying back stock, ``drilling for oil on Wall Street,'' as I will describe in a few minutes, or for other purpose that will not expand the supply of oil or the supply of energy, then they would be paying a windfall profits tax on profits above $40 a barrel at the rate of 50 percent--a 50-percent excise tax--all of which would come into the Federal Government, all of which would be rebated by check to individuals in this country in order to help pay for the higher cost of energy that individuals are now facing. This is very simple. This is not a complex amendment. We are not trying to recalculate income or do things that are particularly difficult. The proposition is simply this: Last year, the major integrated oil companies in this country earned the highest profits in their history. The average price for a barrel of oil was $40 a barrel, and at that price the major integrated oil companies had the highest profits in their history. Now the price is dramatically above that. It has bounced around from $50 to $60 to $70 a barrel, well above the $40 a barrel, and the profits by the major integrated oil companies--and that is all our amendment deals with, the major integrated oil companies--the profits have been extraordinary. The third quarter profits: $9.9 billion for ExxonMobil. I have a list of a number of them I can show. But the third quarter profits are very substantial--the highest in the history of corporate America. So you have all of this gain by the major integrated oil companies, and then all of the pain on the other side. The major integrated oil companies have all of the gain. Who has all the pain? All the American people who are trying to pay for the price of a tankful of gas or trying to figure out how they are going to heat their home in the winter or trying to figure out, if they are a farmer, how on Earth they can order that next load of fuel so they will be able to go into the field in the spring. How do they pay for all that? That is where all the pain is. You have all the gain on one side, and all the pain on the other side. Now, we are told this is just a free market. In fact, I had kind of a mini-lecture about that from the president of Exxon, the CEO of Exxon. He came to the Commerce-Energy Committee hearing we had, the joint hearing, and he kind of gave me a short little mini-lecture about the marketplace: This is the marketplace. Interestingly, he did not say: The free market. He said: The world market. Well, let's think about this for a moment: the world market. For ExxonMobil, $9.9 billion in profits they made just in the last quarter. The world market, he says. Well, let me tell you about the world market. The world market, first, is the OPEC ministers sitting around a table someplace in a closed room talking about production and, therefore, the impact on price. Second, it is the major integrated oil companies that are larger by far than they have ever been because of blockbuster mergers. They all have two names now. It used to be Exxon and Mobil. Now it is ExxonMobil. It used to Chevron and Texaco. Now it is ChevronTexaco. We didn't know they were dating, and they got married. Now, pretty soon, it is going to be ``ChevronTexacoShellExxonMobil.'' It will be all one name. They don't seem to drop any names; they just get bigger and bigger. So the second part--after the OPEC ministers talk about production and price--is these folks, the major integrated oil companies, that are bigger because of blockbuster mergers and have more raw muscle in the marketplace than they have ever had before. Third, and finally, we have what are called futures markets. The futures markets are supposed to provide liquidity for trading. Instead, it has become a speculative bazaar, a grand bazaar of speculation. And that then gives us what is called the world price--not a free market price. This has no relationship to either freedom or the marketplace. This is not a free market. What we have is all of this gain and all of the pain on the part of the consumers. Let me describe a little about what is happening here. Last year, we had the highest profits in our history for the major integrated oil companies. BusinessWeek wrote an article. BusinessWeek is not some liberal rag someplace. We are not talking about some progressive magazine. BusinessWeek is a solid, conservative business magazine. Here is what they say: Why isn't big oil drilling more? Rather than developing new fields of oil, giants have preferred to buy rivals, drilling for oil on Wall Street. All right. They were talking about last year. Last year, ExxonMobil made $25 billion in net income. They spent almost $10 billion to buy back their stock. Does anybody think that expands the supply of oil? No. No. No. That is an approach that certainly makes the stock options of the CEOs much more valuable. It enhances and enriches the corporation. It does nothing at all with respect to expanding America's energy supply and thereby bringing down prices. So BusinessWeek says: Why are they drilling for oil on Wall Street? Oil has been over $20 a barrel since mid-1999. That should have been ample incentive for companies to open new fields since projects are designed to be profitable with prices as low as the mid-teens. Nevertheless, drilling has lagged. Far from raising money to pursue opportunities, oil companies are paying down debt, buying back shares, and hoarding cash. That, from BusinessWeek. Question: If this was the case at $40 a barrel, and oil goes to $60, $65, and $70 a barrel, and consumers bear all of this pain--an increased pain from high prices that in many cases they cannot afford--for a product they must have to drive to work, to heat their homes, to prepare for spring planting, is that fair? The answer clearly is no. Will somebody do something about it? Will somebody stand up and say it is time to do something about it? I hope the answer to that is yes. Just a few headlines. This is from last month: High energy prices lift profits of ConocoPhillips by 89 percent. Its third-quarter profits almost doubled, the first big American company to report earnings for the third quarter. Net income jumped 89 percent. ExxonMobil, from October 27: $9.9 billion in one quarter, up 75 percent. From earlier this year: Big Oil's Burden of Too Much Cash. The world's ten biggest oil companies earned more than $100 billion in the year 2004, a windfall greater than the economic output of Malaysia. Their sales are expected to exceed $1 trillion for the year 2004, more than Canada's gross domestic product. It goes on to say: ExxonMobil, the world's largest publicly traded company, earned more than $25 billion last year and spent $9.95 billion to buy back its own stock. I mentioned that earlier, but that, in fact, is the case. At the hearing with the major CEOs of the big oil companies, I asked that question of the CEO of ExxonMobil. These were people that run ExxonMobil gas stations in the Washington, DC-Virginia-Maryland region. September 9, this is titled, ``Finger Pointing Begins As Gas Prices Jump 24 Cents in 24 Hours; Exxon Dealers Say They Are Chafing Under Higher Prices Decreed From Atop; Station Owners Accuse Big Oil Company of Profiting From Impact of Hurricane Katrina.'' That is very important to point out. Hurricane Katrina hurt these oil companies. Oil was well over $60 a barrel before the first hurricane started circulating in the gulf. That is not what got us $60-plus-per- barrel oil. You have gasoline station dealers saying that Exxon was the one that said, through wholesale prices, you must charge 24 cents more in a 24-hour period. They said: What is going on here? So I asked Mr. Raymond. Well, he wasn't sure that happened. I said: This was a public charge about your company. Didn't you investigate it? No. We didn't. We might have. I don't know. He wasn't sure. Let me back up a step to talk about the slightly larger picture and then come back to this question of fairness. We have a serious problem with energy, there is no question about it. This old planet of ours hosts the U.S. citizens in this little part of the planet. There are about 6.4 billion people who live on this planet as we spin around the Sun. We have a prodigious demand, a huge demand for oil in this little spot called the United States. We suck up--when I say ``we,'' the royal ``we''--everybody sucks up about 84 million barrels of oil every day from this earth. Eighty-four million barrels a day are produced from underneath this earth. We also use 84 million barrels a day on this planet. It turns out that 21 million of that 84 is used right here in this country. This country uses one-fourth of all of the oil that is pulled out of the ground. Is that going to change? Sure. China now has 20 million cars on the road. By the year 2020, 15 years from now, it will have 120 million cars. Add 100 million cars to the mix and the demand to run something through those carburetors or fuel injectors, probably gasoline, ask yourself, in a planet where you are pulling up 84 million barrels a day and this country is using 21 million, one-fourth of it, and we have a demand that now comes from other countries saying, We want some of that, and by the way, we want to have more vehicles on the road--China, as an example--where does the additional oil come from? We have serious issues and significant long-term problems that we have to deal with. I have my own feelings about that. I largely helped write the hydrogen fuel cell title in the Energy bill. I have ideas about what we need to do. We need to grow energy in our fields with renewable fuels, ethanol, biodiesel. There are so many other things we need to do, including encourage the transition of hybrid cars as we move toward a hydrogen fuel cell future. All of those things I will discuss at greater length at some other time. But at the moment, we live now. We can talk about the longer run. John Kenneth Galbraith used to say, in the long run, we are all dead. But we go into this winter, as consumers in this country, confronting a fuel bill that has dramatically increased over last year, and then reading in the newspaper in the morning, wearing a sweater in a home that you have to keep a couple of degrees cooler in order to afford to heat your home, that ExxonMobil has a 75-percent or 89-percent profit or all the majors are showing massive profit increases. So while they sit there fat and happy, racking up the profits, everybody else is trying to figure out how they pay the price. How do you scrape up the money to heat the home, to fill the car, to fill the tanks so that your tractor and farm equipment is ready in the spring? People say: Well, if that is a problem for you, that is tough luck. There are a couple of economists writing in recent days--I won't name them--who can tell us everything about the future but can't remember their home phone number. You know the type. They are telling us what will happen here is if people can't afford to pay the cost of energy, it will force them to conserve more. Easy to say for one of these economists who drive around town in their Volvo or Mercedes cogitating about the future. What about the people who have to use a car to drive to work, have to fill the tank with gas but don't have the money to do so, or the people who understand they live in the northern part of this country where we have tough winters and they have to pay the heating bill and it costs a lot of money and they don't have it? What about that? Senator Dodd and I have offered a proposal. It is widely reviled by the major oil companies. I understand that. For them, it is the hog rule: Give us what we want, we want everything, and what you don't get doesn't matter to us. After all, energy is not something that is like every other commodity. I did an interview with a radio person the other day, and he said: If you are going to have a windfall profits tax with respect to oil profits above $40, what about a windfall profits tax on the shares of Google? I said: Do you drive up to your gas station and say, Fill it up with Google? Gasoline is different. Gassing up your car, providing natural gas or home heating fuel for your home is different. It is a necessity. Everybody needs to do it. It is part of what we are as Americans. It is the way we live. In the long term, we have to make some changes, maybe so. But in the short term, we live now at a time when the major oil companies are exhibiting the highest profits in their history, and everybody else is trying to figure out how on earth to pay the bills. Senator Dodd and I put together the simplest possible plan. We have said: If oil continues at this level, understanding that last year, at $40 a barrel, they had the highest profits in their history for the major integrated companies, we say, for the major integrated oil companies, if the price of oil is over $40 a barrel, we believe that is a windfall profit having nothing to do with fairness or the free market. If the oil companies, however, use that extra money to sink back into the ground for exploration and drilling or to build refineries above ground, to do the things that would expand the supply of energy and thereby reduce energy prices, our proposal will not impact them at all. They will not be taxed. We still don't like the prices, but it won't affect them. They are doing the right thing to expand the supply of energy, which will ultimately bring down the price of energy. But if they do not do that--and they are not; they are buying back their stock, hoarding cash, drilling for oil on Wall Street; they are not doing the right thing--then they would be subject to a 50-percent excise tax on those windfall profits above $40. Senator Dodd and I, unlike others, would not suggest we bring that money into the Federal Government and let it rest here. We suggest that money be brought here and sent out immediately in its entirety as a rebate to the consumers of this country who are paying the bills. They are the ones who are hurt. They are the ones from whom these profits came. They are the ones entitled to have the rebate, if the oil companies are not going to use those profits to expand the supply of our country's energy and oil. This is a hard proposal to misunderstand. Let me just say, there are many who have deliberately done so. Yesterday, a study came across my desk that appeared to have been paid for by an entity called Investors- Shareholders Alliance. Actually, I Googled them on my computer to find out who on Earth this is. But they have been able not to leave traces, even with a Google search. But I don't need to know who they are without understanding who funded that study. That study purported to evaluate a windfall profits tax by number, which was our bill, and the two authors of the study had not bothered to read it, misdescribed it, and analyzed it in a way that was dishonest. So the press people called me and asked for my reaction. I said: It is a complete joke, perhaps a Ph.D. joke. These people have really big degrees and tiny glasses and think they are pretty smart. It is just that they forgot to read our legislation because they evaluated something else and attached our number to it. I am assuming that was paid for by the big oil companies. God bless them. They have plenty of money. They will have lots of money to defend themselves against this proposal that we offer today. I wish no ill will toward the oil companies. I don't. That is not the purpose of this. We produce oil in my State, and I have done plenty of things to be supportive of those who really want to expand America's energy supply and drill for oil. But when I see $65-a-barrel oil and I see people who can't afford to pay the price struggling to figure out how to live day to day, putting gas in the car and heating homes, and then I see record profits announced every single day in the newspapers, I say something is wrong, something is disconnected. It seems to me it falls on the shoulders of this Congress to stand up and do something about it. On this vote, the question is, Who do you stand with and who do you stand for? We have separate interests, the interests of the largest oil companies who would like even higher profits. When one person said to me, Well, why is it a windfall at $65 a barrel, I said, Let me ask you a question. What if it were $165 a barrel? Would you think that was too much, or doesn't that matter to you? At $40 a barrel, I would say, finally, last year the major integrated oil companies, larger by far than they have ever been because of blockbuster mergers, made the highest profits in their history. Now they have dramatically expanded those profits at the expense of American consumers. I believe it is unfair. Our amendment would at least begin down the road to try to do something about it. I am pleased to have offered the amendment with my colleague from Connecticut, Senator Dodd. I yield the floor so he may amplify on my comments.

Mr. DORGAN. Mr. President, will the Senator from Utah yield for a question?

Mr. DORGAN. Mr. President, I wonder if the Senator from Utah will yield on that point.

Mr. DORGAN. I say to the Senator from Utah, I have 20 minutes left, and I will use them after the Senator from Utah is completed. It may take all the 20 minutes to correct the errors of his presentation.